Heat Treatment Service Agreement - DOC by opi56417


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                                     MEMPHIS, TENNESSEE

                   LICENSE CONTRACT
1. Parties
A. The National Hardwood Lumber Association (NHLA) is a non-profit corporation with its main
business location at 6830 Raleigh-LaGrange Road, Memphis, TN 38184.

B. PRODUCER is the company whose formal name appears on the last page of this Contract.

C. HEAT TREATMENT FACILITY. This Contract covers only those products kiln dried or heat
treated at the following plant (“The Facility”) operated by the PRODUCER:

                                           (Name of Plant)
                                           (City and State)

2. Definitions:
“HEAT TREATED” or “HT”. For the purposes herein refers to lumber components or finished
products that have been placed in a closed chamber with artificial heat until the lumber
components achieve a minimum core temperature of 56°C (133°F) for 30 minutes.

“MARK”. The term “mark” when used in this contract means any trademark, service mark,
collective mark, or certification mark, whether registered or not.

“APHIS”. The United States Department of Agriculture, Animal Plant Health Inspection Service.

“ALSC”. The American Lumber Standard Committee.

3. Consideration. This contract is entered into in consideration of the standard fees charged for
heat treatment audit services by NHLA.

Heat Treater’s Audit Mark Contract 11/03                                     Page 1 of 5
4. License of the NHLA HT Mark. NHLA grants to PRODUCER a non-exclusive license,
subject to the terms and conditions of this Contract, to affix the appropriate NHLA Heat
Treatment Mark (“HT Mark”) on each item which is treated at and only at the PRODUCER’S
FACILITY listed above to the heat treatment requirements as specified in the definitions. This
contract prohibits subsequent re-manufacture or otherwise altering PRODUCERS’ finished
products by third parties without re-inspection by a NHLA auditor. Any use by PRODUCER of
any NHLA HT mark must be in accordance with the then-current “POLICIES AND

5. Standards. PRODUCER will place the NHLA HT Marks only on items produced at the Heat
Treatment Facility in compliance with the NHLA HEAT TREATMENT AUDIT PROCEDURES
and all applicable Grading Rule provisions. This rule applies to skids, spacers and similar items.

6. Failure to Comply with Standards. If PRODUCER heat treats hardwood lumber which does
not comply with NHLA Heat Treatment Audit Procedures in effect at the time of production, then
NHLA may (A) terminate this Contract, or (B) remove the NHLA Marks from any non-complying
products at PRODUCER’S expense or both.

7. Inspection. PRODUCER will allow representatives of NHLA and/or ALSC to enter
PRODUCER’S premises at any reasonable times, and PRODUCER agrees to cooperate fully to

       A. Inspect the PRODUCER’S equipment, processes, operations, books and records.

       B. Verify compliance with NHLA Heat Treatment Audit Procedures.

       C. Check “HT” marked shipments at the PRODUCER’S FACILITY and at locations other
       than the point of production.

8. Stamps, Ink, Etc. In order to protect and preserve the uniqueness and permanence of the
NHLA HT Mark, certain standards must be maintained for the way in which the mark is made,
applied or used. For that Purpose, PRODUCER will need and use certain supplies.

       A. Stamps. PRODUCER shall use no stamps bearing the NHLA MARK, unless they
       have been furnished by NHLA. At all times those stamps will remain the property of
       NHLA. NHLA will furnish them to PRODUCER at NHLA’s actual cost. PRODUCER will
       not alter or mutilate the stamps, and will take reasonable precaution against their
       damage, loss, theft, or misuse and promptly report any loss, theft, or misuse to NHLA.

       B. Stamps and Ink. PRODUCER may obtain the grade-marking ink and other equipment
       and supplies from a source other than NHLA if PRODUCER demonstrates that the
       source of such items will protect the integrity, uniqueness and permanence of the Mark.

       C. Place of Application. PRODUCER shall apply the mark at the plant covered by this
       contract, and not anywhere else; not, for example, at the facilities of wholesalers,
       customers, or on trucks, or anywhere else.

9. Protection of the Mark. PRODUCER agrees to help NHLA protect NHLA rights to its marks,
as follows:

Heat Treater’s Audit Mark Contract 11/03                                      Page 2 of 5
       A. Unauthorized Use. PRODUCER will notify NHLA of any unauthorized uses of the
       NHLA Mark which come to its attention. NHLA reserves the right to decide what
       constitutes an infringement of the NHLA Mark, and to decide what action, if any
       (including legal action), will be taken. Any legal action relating to unauthorized use by
       others than PRODUCER will be taken only by, will be financed by, and will be controlled
       by NHLA. PRODUCER agrees to cooperate and assist NHLA in any such action to
       enforce the NHLA Mark.

       B. Claims against PRODUCER. If a claim is made against PRODUCER (in a lawsuit or
       otherwise) that PRODUCER’S use of the NHLA Mark is improper or constitutes an
       infringement, or a breach of the implied warranty against infringement continued in
       Section 2-312(3) of the Uniform Commercial Code or any similar statute or rule law,
       PRODUCER will immediately notify NHLA and immediately forward to NHLA a copy of
       any written claim or suit papers which it has received. In that event, PRODUCER agrees
       that NHLA has a right to intervene itself and/or at NHLA’s expense, assume the defense
       of the Marks or the defense of PRODUCER or maintenance or defense of the claim or of
       the suit.

       C. Challenge. PRODUCER agrees that it will not in any way challenge or contest the
       validity, registration, licensing or ownership by NHLA of the NHLA Mark.

10. Duration and Termination. The term of this Contract is five years and, if the initial term
hereof is not expressly renewed and unless this agreement is terminated, it will be deemed
automatically renewed, upon expiration of the initial or any annual term, for an additional term of
one year, from year to year until terminated. It may be terminated as follows:

       A. Termination by PRODUCER. PRODUCER may terminate this Contract at any time,
       effective immediately upon written notice to NHLA, for any reason.

       B. Termination by NHLA. NHLA may terminate this agreement (including all licenses in
       it) at any time, effective upon written notice for any reason if PRODUCER:

               i. Fails or refuses for any reason to continuously comply with the then applicable
               NHLA Quality Control Procedures for Heat Treatment.

               ii. Uses or permits the use of the NHLA Mark in an unauthorized manner, or in
               non-compliance with paragraph 5 of this agreement or any of the matters
               referenced therein.

               iii. Fails or refuses to comply with any of the provisions of this Audit Agreement.

       C. Automatic Termination. This agreement will automatically terminate.

               i. If PRODUCER is liquidated, ceases to engage in the business of producing
               WOOD PACKAGING MATERIAL or sells all or substantially all of its assets,
               merges into another entity, or a controlling interest in PRODUCER is sold,
               without NHLA’s prior written approval (which approval, or not, shall be in the sole
               discretion of NHLA);

               ii. If PRODUCER attempts to assign this contract or any rights in it to anyone

Heat Treater’s Audit Mark Contract 11/03                                       Page 3 of 5
       D. Effect of Termination on Certain Provisions. Any termination by any party will not
       affect protection of the Mark, any fees then due, return of NHLA Marks or property,
       indemnity, or arbitration

       E. Return of Property. Upon the termination of this Contract for any reason, PRODUCER
       shall immediately return to NHLA (at no cost to NHLA) all stamps or other material
       bearing the NHLA Mark and from termination forward, will not apply or use the NHLA
       Mark. PRODUCER may of course sell or dispose of any inventory bearing the Mark, if it
       complies with NHLA rules and standards.

11. Warranty, Indemnity, Etc. PRODUCER is responsible for the proper use of the NHLA Mark
and such use shall not be deemed to constitute a representation or warranty that NHLA has
inspected the products to which the Mark is attached or that any such product conforms to
applicable standards. PRODUCER hereby agrees to indemnify and hold NHLA (and the
officers, directors, agents, servants or employees) harmless from any and all claims for loss,
damage, liability or expense, arising out of or in any way connected with the production,
storage, transport, use or sale of WOOD PACKAGING MATERIAL to which PRODUCER has
affixed the NHLA Mark.

12. Not NHLA Agents. Nothing contained in this Agreement shall be deemed to constitute
PRODUCER or any of its officers, directors, partners, agents, servants or employees as agents
of NHLA for any purpose whatsoever

13. Arbitration. NHLA and PRODUCER agree that any claims, disputes, suits, or demands
between NHLA and PRODUCER will be arbitrated in Memphis, TN (unless otherwise agreed in
writing) pursuant to the rules of the American Arbitration Association. The only exceptions to this
are that, at the sole election of NHLA, the following may be maintained in any court of applicable
jurisdiction, and in that event will not be and will not be claimed by PRODUCER to be a waiver
by NHLA of the arbitration requirement:

       A. Indemnity. Any claim by NHLA for indemnity of NHLA by PRODUCER, where NHLA
       has been sued in any matter related to products produced or sold by PRODUCER; or

       B. Equitable Relief. Any claim by NHLA for any injunction or an accounting relating in
       any way to PRODUCER’S compliance with this Contract, or the trademark laws.

14. Applicable Law. This Contract, and any rights under it or related to it not governed by
Federal law, will be interpreted or decided in accordance with the law of the State of Tennessee.

15. Notice. Any notice permitted or required by this Agreement shall be considered to have
been “given” if sent by United States mail, registered or certified, postage prepaid, to the normal
business address of the addressee, or to such other address as the parties may designate in

Heat Treater’s Audit Mark Contract 11/03                                      Page 4 of 5
The effective date of this contract shall be _________________________.

                                       NATIONAL HARDWOOD LUMBER ASSOCIATION

                                       By: __________________________________________

                                       Title: ________________________________________

                                       Date Signed: __________________________________


Witness’ Signature


Witness’ Name



                                                    (Full Corporate Name)

                                       Corp. Office Address: ___________________________

                                       City: __________________, State ____ Zip __________

                                       By: __________________________________________

                                       Title: ________________________________________

                                       Date Signed: __________________________________


Witness’ Signature


Witness’ Name

Heat Treater’s Audit Mark Contract 11/03                                    Page 5 of 5

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